From Greenlivingpedia, a wiki on green living, building and energy

Coal seam gas (CSG) is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, and other countries. Australia also has significant deposits.

To extract the gas, a steel-encased hole is drilled into the coal seam (100–1500 meters below ground). As the pressure within the coal seam declines due to natural production or the pumping of water from the coalbed, both gas and 'produced water' come to the surface through tubing. Then the gas is sent to a compressor station and into gas pipelines. The 'produced water' is either reinjected into isolated formations, released into streams, used for irrigation, or sent to evaporation ponds. The water typically contains dissolved solids such as sodium bicarbonate and chloride.[1]

The coal seams that can produce CSG economically are usually between 200m to 1,000m below the surface.